Item 1.01. Entry into a Material Definitive Agreement
Escrow Agreement
On September 25, 2020, Alexandria Real Estate Equities, Inc., a Maryland
corporation (the "Company"), and its subsidiary, Alexandria Real Estate
Equities, L.P., a Delaware limited partnership (the "Operating Partnership"),
entered into an escrow agreement (the "Escrow Agreement") with Citibank, N.A.,
as administrative agent (the "Administrative Agent"), certain lenders (the
"Lenders") and Shearman & Sterling LLP, as escrow agent (the "Escrow Agent"),
pursuant to which the Company, the Operating Partnership, the Administrative
Agent and the Lenders, intending to enter into a credit agreement in the form
attached as an exhibit thereto (the "Credit Agreement"), submitted their
signature pages to the Credit Agreement to be held by the Escrow Agent in
escrow. Pursuant to the Escrow Agreement, the Escrow Agent will release the
signatures to the Credit Agreement and the Credit Agreement will become
effective upon satisfaction by the Company of certain conditions precedent to
the effectiveness of the Credit Agreement set forth in the Credit Agreement. If
the conditions are not satisfied by the Company on or prior to October 31, 2020,
the Credit Agreement signature pages will be deemed to have been revoked, the
escrow arrangements under the Escrow Agreement will terminate, and the Credit
Agreement will not become effective.
The conditions to be satisfied by the Company include the delivery of certain
legal opinions and certificates, the termination of, and payment in full of the
obligations under, the Sixth Amended and Restated Credit Agreement, dated as of
September 28, 2018 (the "Existing Credit Agreement"), among the Company, the
Operating Partnership, the other guarantors (if any) from time to time party
thereto, each lender from time to time party thereto, each L/C issuer from time
to time party thereto and Bank of America, N.A., as the administrative agent,
and the payment of prescribed fees. While there can be no assurance in this
regard, the Company expects that it will satisfy the conditions on or prior to
October 6, 2020, and that the Credit Agreement will thereupon become effective.
The purpose and effect of the Escrow Agreement are to permit the Company to
"lock in" currently the terms and conditions of the Credit Agreement and the
identities of the lenders thereunder while deferring the commencement of the
term of the credit facility to be provided under the Credit Agreement until the
Company satisfies the conditions to effectiveness. As a result, the term of the
credit facility will not begin and the Company will not be able to avail itself
of the credit provided thereby until conditions to the effectiveness of the
Credit Agreement are satisfied.
Credit Agreement
Upon effectiveness, the Credit Agreement is expected to replace the Company's
Existing Credit Agreement. Citibank, N.A. is anticipated to serve as
administrative agent, and Citibank, N.A., BofA Securities, Inc., JPMorgan Chase
Bank, N.A., Goldman Sachs Bank USA, and RBC Capital Markets are anticipated to
serve as joint lead arrangers and joint bookrunners under the Credit Agreement.
Bank of Nova Scotia, Mizuho Bank, Ltd., Sumitomo Mitsui Banking Corporation and
U.S. Bank National Association are anticipated to serve as additional joint lead
arrangers under the Credit Agreement. The Credit Agreement is expected to
provide for, among other things, a $3 billion unsecured senior revolving credit
facility (the "Revolving Credit Facility") and an accordion option to increase
aggregate commitments under the Credit Agreement by up to an additional $500
million. Borrowings under the Revolving Credit Facility are anticipated to bear
interest at a "Eurocurrency Rate", "LIBOR Daily Floating Rate" or a "Base Rate"
specified in the Credit Agreement, plus, in any case, a margin specified in the
Credit Agreement. The margin at closing applicable to loans based on the
Eurocurrency Rate is anticipated to be 0.825%. Among other things, the Credit
Agreement is expected to be subject to certain annual sustainability measures
whereby the Company may be entitled to a temporary reduction in the interest
rate margin of 0.01%, provided it meets certain sustainability thresholds as
provided in the Credit Agreement.
The Credit Agreement is expected to have a maturity date of January 6, 2026,
provided that the Company exercises its rights to extend the maturity date twice
by an additional six months for each exercise upon the satisfaction of certain
conditions.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The information included in Item 1.01 is incorporated herein by reference.
Forward-looking Statements
This current report on Form 8-K contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended. These statements may be
identified by the use of words such as "believes," "expects," "may," "will,"
"should," "seeks," "intends," "plans," "estimates," or "anticipates," or the
negative of these words or similar words, and include (without limitation)
statements regarding the anticipated effectiveness and maturity date of the
Credit Agreement and the expected satisfaction of the conditions to the Credit
Agreement. Forward-looking statements involve certain risks and uncertainties,
and actual results may differ materially from those discussed in each such
statement. A number of important factors could cause actual results to differ
materially from those included within or contemplated by the forward-looking
statements, including, but not limited to, the factors described in the
Company's filings with the Securities and Exchange Commission, including the
Company's most recent annual report on Form 10-K and any subsequent quarterly
reports on Form 10-Q. The Company does not undertake any responsibility to
update any of these factors or to announce publicly any revisions to any of the
forward-looking statements contained in this or any other document, whether as a
result of new information, future events, or otherwise.
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